Social Security COL increase? Hahahahaha…

Seniors getting their 3.6% SS COLANews that Social Security recipients will be getting a 3.6 percent cost of living increase in 2012 may get everybody all excited. Wait until the fine print comes out. [Credit for cartoon of seniors celebrating SS COLA: http://www.livemillennium.com/profile_links.asp?AID=13447]

We are betting that Medicare Parts A and B deductions from SS payments will eat that up – perhaps all of it. If not, Parts C and D surely will. As a person retired for SS purposes, we know that’s what happened the last time there was an bump in these alleged retirement benefits. We have no idea how this works for SSI – supplemental security payments for disabled people of any age.

The news we’ve seen so far makes no mention of how much Medicare costs will be, but we do know they are deducted from SS payments. Eleven months ago we posted a note entitled “Why I hate Medicare.” Begin IFO post quote:

###How about that new drug benefit? For you youngsters not getting the Medicare booklet yet, let me enlighten you about this notice in a box on the last page of the 138 page booklet on 2011 Medicare Costs:

“If your income is above $85,000 (and you file an individual tax return) or $170,000 (and you file a joint tax return), you will pay an income-related monthly adjustment amount in addition to your Part D plan premium. If you have to pay a higher amount based on your income, Social Security will notify you in November. You can also visit http://www.medicare.gov to find your Part D monthly premium.”

Below the box is the following note: “The income-related monthly adjustment amount will be deducted from your monthly Social Security check, no matter how you usually pay your plan premium. If that amount is more than the amount of your check, you will get a bill from Medicare.

So, that fabulous Medicare Part D “benefit” could eventually suck up your entire Social Security “benefit.” But that’s okay. You’re rich, right? Wonder if losing your SS will reduce your income below the $85,000? Would that let you have your SS back?

Do you know how easy it is to get to $85K? A surviving spouse w/a $2 million life insurance policy settlement ($70K at 3.5% return), a common enough arrangement, plus SS of about $1,500 a month ($18,000 a year) gets there with no other additional income. Could the drug premiums actually eat up all that SS? We couldn’t find the cost of Part D anywhere in the booklet. We did learn that you have to get it from an insurance company and there are warnings all over about the penalty for enrolling late. ###

End of IFO post quote. End of IFO rant. IFO’s outrage will never end.

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About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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